Low pulp prices hurting the forest economy

NOTE: PULP INVENTORIES ARE EXTREMELY HIGH AT BOTH PULP MILLS. IT IS ADVISED TO AVOID HIGH % PULP STANDS AND MAKE LARGE PULP (3.5″ TOP MIN.). FURTHER STOPPAGES IN DELIVERIES ARE A POSSIBILITY.

Low softwood pulp prices are cited in Nov. 2016 issue of Atlantic Forestry Review as a factor contributing to the current wood glut in N.B. with a low gate price of about $38 per metric tonne (~$76/cord), while a “good market pulp price should be worth $50/t, $45 in an average market, and $40 in a poor market…At $38/tonne it hardly pays to cut and haul it.” (Report in Industry News and Views section by David Palmer).

The importance of pulpwood in the forest product value chain should not be underestimated. Poor pulpwood markets remain a serious issue in Nova Scotia, and contractors and truckers are telling me they haven’t seen wood markets this bad for many, many years. The lack of a good pulpwood market makes the economics of forest improvement treatments, such as commercial thinnings and selection management, almost impossible. Mature spruce stands also have significant pulpwood content from tree tops and poorly formed trees, and without a decent low-grade wood market woodlot owners will continue to find it difficult to participate in the forest economy. The fall of pulpwood prices is also related to the drop in stud wood and log prices and the tighter specs for all forest products that we are currently experiencing. Our markets are very interconnected; with the Nova Scotia Power biomass plant and Scotia Atlantic Biomass no longer operating, this serious problem has become critical and needs to be addressed.

I appreciate that none of this is likely to be news to forestry workers.